Cannabis stocks surge as Biden administration moves to reclassify marijuana

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  • The Biden Administration plans to reclassify marijuana as a Schedule III substance, placing it alongside Tylenol with codeine, anabolic steroids and testosterone, four sources familiar with the decision told NBC News.
  • Marijuana has been a Schedule I substance for more than 50 years, the same category as heroin and methamphetamines.
  • Stocks linked to cannabis surged on an otherwise down day for the market.
Trade Roots, a Wareham-based Cannabis dispensary grows cannabis plants for making CBD with THC in their greenhouse, and manufactures CBD products for sale in their shop and distribution to buyers. 
John Tlumacki | Boston Globe | Getty Images

Cannabis stocks leapt on Tuesday afternoon, buoyed by a Biden administration decision to ease federal restrictions on marijuana.

The U.S. Drug Enforcement Administration is expected to approve an opinion by the Department of Health and Human Services to reclassify marijuana as a Schedule III substance, NBC News reported, citing four sources with knowledge of the decision.

Marijuana has been labeled a Schedule I substance for more than 50 years, the same as methamphetamine and heroin. Drugs in that category are defined as substances with “no currently accepted medical use and a high potential for abuse,” according to the DEA.

A move to Schedule III would place marijuana alongside Tylenol with codeine and anabolic steroids – that is, “drugs with a moderate to low potential for physical and psychological dependence.”

Investors in cannabis stocks cheered the move, with the AdvisorShares Pure US Cannabis ETF (MSOS) surging nearly 20% in afternoon trading. Amplify U.S. Alternative Harvest ETF (MJUS) jumped about 19%.

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MJUS performance 1-day

Individual marijuana stocks with small market capitalizations also rallied. Curaleaf Holdings surged 19% to touch a new 52-week high, while Trulieve Cannabis climbed nearly 30%.

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